Abbotsford buys way out of money-losing deal with Heat as AHL team to leave town

Elliott Pap, Vancouver Sun04.15.2014

Abbotsford Mayor, Bruce Banman (left) and Ken King, president and CEO of the Calgary Flames, at a news conference announcing the departure of the AHL's Abbotsford Heat from the Abbotsford Entertainment and Sports Centre at the end of this season on Tuesday, April 15, 2014.Nick Procaylo
/ PNG

Dean Clark, regional vice-president at Global Spectrum (left), and Abbotsford Mayor Bruce Banman at a news conference announcing the departure of the Abbotsford Heat from the Abbotsford Entertainment and Sports Centre on Tuesday, April 15, 2014.Nick Procaylo
/ PNG

Ryan Walter, president of the Abbotsford Heat, at a Tuesday, April 15, 2014 news conference announcing the departure of the AHL franchise from the Abbotsford Entertainment and Sports Centre at the end of this season.Nick Procaylo
/ PNG

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ABBOTSFORD — The Abbotsford Heat are leaving the Fraser Valley, punted by the city after five money-losing seasons, but the Vancouver Canucks aren’t about to fill the void with their American Hockey League franchise.

The Canucks were eyeing Abbotsford a year ago but eventually settled on a six-year agreement in Utica, N.Y., where the Comets were born. Comets president Robert Esche was adamant Tuesday that the Canuck affiliate was staying put.

“We have a six-year deal with them and they couldn’t pull out even if they were upset,” Esche told the Utica Observer-Dispatch. “There’s nothing there.”

The Canucks also confirmed their commitment to Utica and issued a statement to that effect.

“We are committed to our AHL affiliate, the Utica Comets and enjoy a strong relationship with our partner club,” the statement said. “A strong base of Utica fans have shown tremendous support throughout the season and the Canucks intend to honour our long-term partnership agreement with the Comets.”

The Heat, farm team to the Calgary Flames, were a consistent money-loser and cost the taxpayers of Abbotsford $7.2 million in subsidies over their five-year run. It also cost the taxpayers another $5.5 million to buy out the remaining five years of the agreement. Losses of an additional $11 million were projected had the Heat remained.

“There is absolutely no question in our minds that taking this step with the Heat and the Calgary Flames organization is the best scenario financially for our city and our rate payers,” Abbotsford mayor Bruce Banman told a news conference Tuesday. “I am confident that we have achieved the best deal for the residents of Abbotsford. We can’t undo the losses in the past but we can mitigate the losses in the future and that’s exactly what we’ve done.

“Any team coming forward has to be revenue positive. We will not be subsidizing private industry again.”

The city plans to fill the arena with more community events and hopes to achieve additional savings by renegotiating existing management contracts with Global Spectrum, the Philadelphia-based company hired to run the arena.

Former NHLer Ryan Walter spent the last three seasons as Heat president. His main function was to sell tickets and make the franchise viable. He is not convinced that a Canuck affiliation in Abbotsford would automatically be a financial winner.

“I don’t know if it would be viable if the Canucks were in here,” said Walter, 55. “I think people think the whole building would be sold out if the Canucks were here but I don’t think that would happen. So it would be another experiment. As for myself, I’m not going to move forward with the Heat franchise. It’s a disappointing day.”

Banman, who says the city-owned facility will continue to draw on an approximate $1.8-million operating budget, indicated that Abbotsford would be seeking a new anchor tenant, perhaps a Western Hockey League team. The WHL was in nearby Chilliwack for five seasons — from 2006-2011 — before re-locating to Victoria and becoming the Royals.

WHL commissioner Rob Robison said his league finds the Fraser Valley market “attractive” but added there is no team looking to relocate and there are no plans for expansion.

“Certainly the market is of interest to us and now that it appears to be available, we will certainly put it on our radar screen,” Robison said from Calgary. “At this point, we don’t have any franchises that are considering relocation and there is no expansion coming in the foreseeable future. In our view, we’ve expanded sort of beyond our ideal number of 20-22 teams. So the only way we could be there is through relocation.

“We do believe the Fraser Valley would support a WHL franchise but we just felt that the impact of having both Abbotsford and Chilliwack sharing, to some extent, the Fraser Valley market, it was difficult to operate under those circumstances.”

Flames chief executive officer Ken King conceded the relationship between his organization and Abbotsford was not benefiting the taxpayers of Abbotsford. Now he and Flames president of hockey operations, Brian Burke, will scout a new location for their farm team with Glens Falls, N.Y., among the sites. Glens Falls is losing its AHL franchise, the Adirondack Phantoms, as the parent Philadelphia Flyers are moving the team to Allentown, Pa.

“We had a superb relationship and it worked for us,” said King. “But it didn’t work for the taxpayers and the city and it didn’t work for the viability of this building. There are legal obligations and there are moral obligations and I think we need to understand, as good as the city was to us, we also need to reciprocate. We would have much rather stayed here.

“We hoped and prayed and worked hard but, in the end, we simply could not see a conclusion that was beneficial to all parties involved,” added King. “In the best interests of everyone, sadly, I think this is the most appropriate conclusion, no matter how regrettable this conclusion is.”

The Heat played out of the 7,000-seat Abbotsford Entertainment and Sports Centre — renamed the Abbotsford Centre on Tuesday — but attracted an average of 3,007 fans this season, second lowest in the 30-team AHL. They could not overcome the obstacle of operating in the Canucks’ shadow and their best crowds were usually when the Canuck farm team came to play them.

The Heat also had to provide travel subsidies to incoming teams as they were the only franchise based on the west coast. Their closest opponents were in Chicago, Milwaukee, Iowa and Oklahoma City. They still have playoff home dates to come this season.

• Heat and the Abbotsford Entertainment and Sports Centre: By the numbers

$66 million: Referendum approved in November 2006 to borrow funds for building.

$7.2 million: Losses incurred to date by taxpayers of Abbotsford to subsidize Heat.

$11 million: Projected losses for the next 5 years if Heat remained.

$5.5 million: Amount paid to Calgary Flames to terminate final five years of agreement

$5.7 million: Amount guaranteed to Flames to operate Heat per season.

$1 million: Approximate amount, according to Mayor Bruce Banman, to cover travel costs for teams flying in to play the Heat.

3,007: Average attendance for the 2013-14 regular season for 38 home dates.

29th: Where the Heat ranked among the AHL's 30 teams in attendance.

3: Number of playoff appearances by the Heat in five years (includes 2013-14 season).

2: Number of playoff series won by the Heat.

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Abbotsford buys way out of money-losing deal with Heat as AHL team to leave town

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